tv Wall Street Journal Rpt. NBC December 30, 2012 2:30am-3:00am EST
i'm sara gore. i'll see you next week on an all new episode of "open house nyc." hi, everybody. happy new year. welcome to the ""wall street journal" report. the fiscal cliff, the taed line and what it means. we'll look ahead, we'll look back, our all-star panel on the big news that hasn't happened yet if preview of the big stories and trends for 2013. and then we will hit the highlight reel. my interviews with the most important, influential and interesting people of the past year. the wl journal report begins right now. >> this is america's number one financial news program, the "wall street journal" report. now, maria bartiromo. >> all that ahead, but first, here's fill griffith with the look at the stories making headlines this week. >> thanks, maria.
here's what's making news as we are heading into a new week and new year on wall street. congress is working the weekend, attempting to avert some part of that $6 billion in automatic tax increases and the spending cuts that are set to kick in on january 1st. that fiscal cliff and its potential impact on our economy brought lawmakers from both houses to washington for last-minute negotiations. concerns about the cliff spooked investors, the holiday shortened trading week was lighter in volume but higher in volatility. the worst decline of the month on thursday after a disappointing read on consumer confident and some public statements by congressional leaders. and yet with one final trading day to go, all the major averages were still showing positive performance for the year of 2012. meantime, the u.s. is set to reach the debt limit on monday. that according to treasury secretary tim geithner in a letter to congress, though, he did say he expects to take what he called extraordinary measures to extend the government's
borrowing ability for another two months or so. and even your cup of coffee, once a deal on the fiscal cliff. baristas at the 120 starbucks in washington, d.c. were encouraged by management to add a shot of bipartisanship to their drink orders and remind customers in our nation's capital to come together. >> wall street is typically quiet her this time of year, of course, this last week of 2012 was marked by investor concerns over congress' new year's eve plans and that looming fiscal cliff. so what impact does it have on your money? alison deans is with us, senior adviser at varick asset management. nice to see you. happy new year. do you have two plans for 2012, one that includes the fiscal cliff and one that doesn't? how do you prepare for the new year as an investor? >> pretty much. i mean, the outcome, if there is some type of healthy resolution to the fiscal cliff, even if they defer it for a week or two but come up with some healthy resolution, i think it bodes really well for global markets.
if we wind up going into fiscal cliff and the world loses any faith in our government to accomplish anything that's helpful or relevant, i think that could impact the markets and it could impact the economy. >> there has to be a long-term impact, though. i mean, let's face it. any deal that they can come up with is an austerity deal. it will involve some form of tax increases, you would think, and some kind of spending cuts on the any. that slows things down. it's not a growth initiative, necessarily. >> it's not a growth initiative although my sense is most of it will be cut backs in government and there will be some higher tax rates in some aspects of the market, if it's just taking back some of the lower tax rates that were put in place during the bush era the impact of lower tax rates had on the economy was minimal so my sense is the i'm fact it will have on the economy are higher will be minimal. if it's somewhat draconian, that's where it could have an effect. but the offset to any reduction
coming from government spending and healthy government deleveraging is once the uncertainty is gone, it should give people as well as companies greater confidence in making longer term plans for spending and for growth. >> where do you think we'll see evidence of it initially? there's all kinds of stories out there right now. we will see the cost of milk doubling maybe. you know, all those kinds of things. where do you think we will see it and what impact does that have on the consumer and/or investor, do you think? >> you know, my sense is you're going to see it by a lot of the government help being pulled away, people seeing fewer benefits, a reduction of bay checks. and there could be a bit of reduction in overall consumer spending, consumer behavior. the positive side will be that we think corporations might start reinvesting in their businesses. and i think the long run health of our economy is not to be so reliant just on consumer spending anyway. if the consumers pull back a little bit but the offset is corporations start reinvesting in infrastructure in their businesses, that's a real plus. >> do you think that these coes will turn the spigot on and
start spending more and hiring more? we've heard so many ceos come through who say they are just waiting to see what happens with the fiscal cliff, but by the same token, though, does that necessarily mean that suddenly we have more capital expenditures for the economy next year? >> i think there's few reasons why we will. one, global growth. china appears to be stabilizing and the rest of the emerging markets are glowing. more demand for export business. number two, korpgs are sitting on $1.5 trillion of cash. they have a lot of cash. they just need to know how to spend it based on overall tax policy. and number three, if you look at equipment and planted equipment in america today, the inventory is old and due foreinvestment a upgrades. there's a lot of pent up demand for domestic spending. >> there have beent of the value of their house and if they start seeing prices stabilize and economy? >> the offset is that people look at the value of their houses and start feeling better. one-third of household wealth is
the value of their house and if they start seeing prices stabilize and appreciating, that could offset some pullback in overall consumer spending. >> where will we make money then, do you think? >> my sense is emerging eeing p stabilize and appreciating, that could offset some pullback in overall consumer spending. >> where will we make money then, do you think? >> my sense is emerging markets is where you're going to have a lot of growth. those markets have been depressed for a couple of years so equities in emerging markets, equities in the u.s. keep clear of yeurope for now. i think high yield debt will be interesting. within equities, if the economy starts really growing it will be more broad based and people can move away from the more conservative investments go into more cyclical as well as smaller cap stocks. >> optimistic view on 2013 from allisison deans. always good to see you. >> thank you. when we return on the "wall street journal" report, maria will be back gazing into the crystal ball of 2013. what the new year may bring to
wall street, to washington, and to your wallet. predictions and analysis to get you to january 1st and beyond. and then later, what a ride it's been. some of the biggest names and stories and ideas that made the 12 months of 2012. as we go to the break, a look at how the stock market ended the week. there has to be a long-term
impact. p impact. let's face it, any deal that they can come up with is an > anothep anoth approaches and instead of resolutiop resolutions werp ar aand approaches and instead of resolutiop resolutions werp ar aan predictionsp and washington, wall street, and around the world. joining me nr joining me now i washington post" ezra klein and editeditor ap editor at er
columnist, mike santoli.pmi the markets are nearly four years old. in 2013 what's you're outlook for the market stability and the broader economy? >> i think the market is finally realizing that it's kind of emerged from this long-term kind of uncertainty trade out there. the big picture questions are whether the central banks can kind of stabilize the system, whether, for example, china last year was going to go into a recession, whether europe can kind of keep it together through recession. i think we've gotten past through most of those things and i think it's slow and steady u.s. economic growth picture is probably the best bet, but i think it's going to feel better to the average person because of the component to that growth, meaning housing, autos, and finally jobs. looking like they're going a decent up spring. i think a slow and steady but feeling better than the past couple of years. >> it definitely does feel better. ezra, uncertainty seems to have been the theme this year. businesses don't like it. investors don't like it. how much uncertainty do you expect in 2013 for the political and for consumers? >> plenty. the world is an uncertain place. to mike's point, i agree. i think the fundamentals both here and global are looking pretty strong. the problem is we're seeing essentially simultaneous deterioration in political systems across the world. obviously europe has been having a number of problems, but i wouldn't exactly say washington has been covering itself in glory.
so one of the big questions going forward, i think, is whether or not the political system will do enough to -- i don't want to exactly say get out of the way because they have to do enough to help structure our recovery, right? we can't have bad policy happening, whether or not they are helping or hindering. with a couple of decent decisions they can really provide juice to the recovery now. >> what do you see as far as the relationship between the president and congress this year? >> it's not been great to far. it will matter quite a bit whether or not they are able to get a fiscal cliff deal done in the near future. somebody clears the decks to do other things, things that might not be quite as either controversial or may not matter as much to the economy. so if you have a long fight over immigration, that's not a great thing but it's better than having a fight that leads to a debt ceiling default. the question is whether or not they are able to move past this in a way that allows for making agreements going forward or whether or not we end up in the essentially endless series of smaller fiscal cliffs this year.
things get pushed forward for two weeks, two months, three months at time and another debt ceiling in early 2013. if that's the case, there's going to be a lot more uncertainty and the structure will be there a lot more, very angry, tense, bitter, 11th hour negotiations going forward. >> mike, what sectors or injuries are you watching in 2013? >> i think what's interesting is that the housing revival has obviously been embraced by wall street. a lot of direct housing related stocks have done well but some of the same dynamics, years of pent up demand are at play in auto sector, domestically and globally, those stocks have not really powered forward as the housing stocks. that's one area. i think broadly speaking the industrial area has really gotten punished over the coast of 2013. even though the overall markets did well, on a relative basis they did not because of the china fears, because of general slowdown art to want ceos to have the confidence to start going out and growing, whether it's by acquisition or
other means. >> we ezra, let's talk about the slate for domestic policy agenda. eos to have the confidence to start going out and growing, whether it's by acquisition or other means. >> we ezra, let's talk about the slate for domestic policy agenda. walk us through the one big event, the roll out of the first tax increases of the affordable care act. ezra, let's talk aboue slate for domestic policy agenda. walk us through the one big event, the roll out of the first tax increases of the affordable care act. will we see motor vehiclemeveme issues? >> different category than all the others is that it's law. it's all going to be rolling out over the next couple of years. it's very significant action in congress that would be signed by the president to alter some substantially change it. so you will see a couple of things happening there. one, some of the major taxes will roll out, three big taxes that are going to fund, although not, we should be clear on this, the tax on high value health insurance plans provided by
employers. that won't begin until 2018. you will see changes t in the medical delivery system itself. key performance for hospitals in terms of how they pay for services, moving away for pay for volume and towards pay for quality. those are going to roll out over the next year. come the end of next year 13, we will see the massive coverage expansion where many, many, many people get the tax credit to either get private insurance or get covered by medicaid. bestill expect the scale of that expansion by the beginning of 2014 to be in the range of 25 to 30 million people. they will be a lot of folks. beyond health care, it becomes a lot less certain. gun control, i wouldn't -- i expect a significant conversation. it is hard to imagine anything tremendously radical being done given both the come position of congress and due to now congress's powerful areas. >> mike, what's your ideas or predictions for the new year? any surprises that we should be looking for? what do you think, positive or
negative in the year ahead? >> i think there's a chang for one very positive surprise, supply driven decline in energy prices well beyond what the markets are handicapping. i can't say that's a 2013 event but it does seem like the clues are piling up in that direction. that would be tremendously bullish. that's an underappreciated element of a pos 90s boom. very cheap energy without being driven by economic weakness. that's one thing. and then i guess on the potential negative side i really do think that there's always the chance that the central banks have kind of, you know, kind of -- they've basically have the system in therapy right now and they think they have the medical dosages right in terms of free money. and if they sort of lose control, whether it's in europe or somewhere else, i really do think the markets should be unprepared for that if we go down a few months down that road. >> mike, ezra, good to have you on the program. thanks so much. >> thank you. >> have a great new year. up next on the "the wall
vehicle that's just right for you. no matter which lists you're on, lease a 2013 c-250 for $349 a month at your local mercedes benz dealer. and some difficult ones. but, through it all, we've persevered, supporting some of the biggest ideas in modern history. so why should our anniversary matter to you? because for 200 years, we've been helping ideas move from ambition to achievement. and the next great idea could be yours. ♪ remarkable year. it's been my privilege to bring you insights on stories as wide ranging as the presidential election, the fiscal cliff, jobs of the future, and even a few movie stars. we wanted to take a few minutes to highlight the best of 2013.
this is the year that was and thank you for sharing it with me. >> i wish the people had more rational conversation to collaborate to how we can make the country grow faster, create jobs and create opportunity. >> america's always thinking it's in decline. the decline is by people left, right, and center. it's almost like a publishing craze. not quite "50 shades of gray" or sexy, but, still -- >> the biggest priority for the united states right now is getting recovery going at a rate that is rapid enough to produce sustained reductions in unemployment. >> under current law, on january 1st, 2013, it's going to be a massive fiscal cliff of large spending cuts and tax increases. >> find some way to avoid the fiscal cliff, to avoid doing anything that would contract the economy now. >> does that mean extending the tax cuts? >> the real issue is not whether they should be extended for another few months. the real issue is whether the price the republican house will put on that extension is the
permanent extension of the tax cuts. >> grur going to extend the tax cuts you're going to have 3.8 trillion added in ten years to the $16 trillion we already owe. i mean, have a drink. >> we can't keep giving the middle class tax cuts like the president says he wants to do and romney says he wants to do when we got -- when we have a trillion dollar deficit. >> just a few days before the election day and you're analysis of the polls have given the president better than 80% chance of winning re-election? >> the fact that the president leads in the polls in ohio and iowa states where you would need -- he would need to win 207 electoral votes means he's the favorite in the electoral college. >> this is the era of flation. bernanke is writing checks, mar maria. >> writing checks from the -- >> my friend steve jobs has lots of cash in the bank. >> you started brewing sam adams beer in your kitchen in 1984.
tell me how that happened, how -- how did you decide you wanted to brew your own beer in the kitchen? >> well, i come from six generations of brew masters, so beer was kind of in my history, in my blood. about .06, that s still legal. >> homeless to a little their? >> we believed what we did would work, no matter how bad times were. >> in 2020, are we going to be in a much better place? the alternative was not the greatest health care system in the world with no problems. the alternative was a health care system with a lot of problems. >> you were starting your career today, secretary so lease, where would you work? >> i would want to make sure i have the skill sets available and that means soft skills, it means also technical skills. flex, even welding. did you know there's a shortage of people that have that skill available right now? >> these are the cars that run on sunday. this is the championship car that tony stewart drove. >> people start watching movies on phones and probably their
watches next year. >> yeah, smaller and smaller. >> do i miss film making? i have to tell you the truth, no. and one of the reasons, i've been doing it for a long time. and i've always thought that you get to a certain age where you should change what we do, we should look at life. what is our passion. >> every 20 seconds a kid somewhere on our planet dies because of lack of access to clean water or sanitation. we probably don't know anybody who has ever even been thirsty. i have to keep reminding myself that this is an everyday reality for a whole lot of people. >> for those who don't know, what is sky hook? >> sky hook is a hook shot on the basketball court. put my own little stamp on it. up and over, perfect. >> the bigger the risk, the bigger the payoff. when i did "lion king" i had no idea what it cost. no one talked to me about honey. i found out last year what it cost and it was much more than i thought but it's made upward of $6 billion, so no one ever really complained about it. >> there are great chefs and there are great businesspeople. you are both.
>> being a great businessman, i think it's like in the kitchen, you have to surround yourself with talented people you trust. >> what i love about a restaurant. >> thank you for coming. >> thank you so much for having us. everyone went into the family business. no black sheeps that wanted to go somewhere else? >> one lawyer, wanted a doctor, and architect. >> and you got three restaurateurs. >> i know that some journalists have triggered you to cry. >> no, no, no. >> are you trying to change that image? >> no. i've met every crier in america. they come over to me and put their arm around me and say, hey, i like you. >> my thanks to all the great guests we talked to in 2012. up next on "the wall street journal report" we'll look at the news in this coming week and continuing our look back this weekend, who moved the markets, impacted your economy, or even made you spend differently in 2012. my take of the business portion of the year. of the year. stay with us.
i hope you will to he my on twitter and on google plus. now the stories a week ahead. tuesday is the first day of 2013. markets will be closed for the new year's holiday. wednesday, total auto sales for december will be out and then on thursday the federal reserve releases the minutes of the last meeting on the open market committee. friday the all important monthly jobs report will be out. that will tell us how many jobs the economy lost or gained in the month of december.
tip cli a market mover. and i would have to say for my businessperson of the year, drum roll, please. ben bernanke, chairman of the federal reserve. who, because he surrounded us with free money and his low interest rate policy triggered a stock market rally all year long, an economy that while moving slowly certainly showed growth throughout the year. bernanke's policies encouraged lending, it encouraged borrowing, and also told us that there are few alternatives with any returns for our money beyond stocks and housing. for all of that, ben bernanke is my pick for businessperson of the year 2012. that will do it for us for today. thank you of so much for joining me. next week bewe will coming to you with a brand new look and a brand new name. look for "on the money with maria bartiromo." i'll continue to be here with you as are all of our great guests every week where wall street meets main street. happy new year, everybody, wish you the best for 2013.